UK employers are twice as confident about the economy as they were this time last year and many intend to take on more staff in coming months. But this jobs boom could be at risk from growing skills shortages, according to July's JobsOutlook survey from the Recruitment & Employment Confederation), released yesterday.

According to employers surveyed in June, a third predict a shortage of engineers to fill permanent (32%) and temporary (34%) technical and engineering jobs. When looking at the three month rolling average of 600 employers' responses the figures remain high, with a fifth of employers (22%) predicting difficulties recruiting permanent candidates in the sector and a quarter of employers (26%) seeing the same problems in respect of temporary roles.

The reasons businesses choose to take on temporary agency staff are changing too as the recovery progresses. Almost two thirds of employers across all sectors (64%) say they use agency workers because temporary staff provide 'short term access to key strategic skills', a more popular answer than 'covering leave' (61%), 'responding to growth' (49%) or 'keeping running costs down' (30%).

This edition of also found that:

* 87% plan to take on more permanent staff in the next three months* 78% plan to take on more permanent staff in the next 4 - 12 months* 4%t intend to increase their use of agency staff in the next quarter* 42% will increase use of agency workers over the next 4 - 12 months

"Employers are going to have to work harder to attract candidates as the labour market booms and competition for talent hots up," warns REC chief executive Kevin Green. "Skilled individuals are scarce in technology, engineering, construction and HGV driving, and companies are already increasing pay to encourage people to jump ship and join their workforce.

"However, attracting talent goes beyond focusing on pay packets - workers are increasingly looking for more flexible hours, better benefits packages and nicer work environments. Your company brand and reputation are crucial to ensuring you are more appealing than your competitors to the workers you need to attract."